Annual Report for Fiscal Year Ending 12-31, 2025 (Form 10-K)

Management's Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and the related notes to those statements included elsewhere in this report. In addition to historical financial information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results and timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those discussed under "Risk Factors" in Part I, Item 1A and elsewhere in this report. See "Special Note Regarding Forward-Looking Statements."

Overview

RxSight, Inc. is a commercial-stage medical technology company dedicated to providing high-quality customized vision to patients following cataract surgery. Our proprietary RxSight® Light Adjustable Lens system ("RxSight system") is the first and only commercially available premium cataract technology that enables doctors to customize and optimize visual acuity for patients after surgery. The RxSight system is comprised of our RxSight Light Adjustable Lens® (LAL®/LAL+®, collectively the "LAL"), RxSight Light Delivery Device™ ("LDD™") and related accessories. The LAL is a premium intraocular lens ("IOL") made from the proprietary silicone-based photosensitive material that undergoes controlled changes in refractive power when exposed to specific ultraviolet ("UV") light patterns generated by the LDD.

We designed our RxSight system to address limitations of conventional premium IOL technologies by providing doctors with a more precise and adaptable method for achieving desired visual outcomes for their patients. Conventional premium IOLs require patients to select their visual priorities before surgery and accept the optical trade-offs inherent in those choices. Surgeons must rely on a series of preoperative measurements and predictive formulae to determine the appropriate lens power. If the selected power is not optimal, the patient may experience less-than-ideal results that could require a subsequent corneal refractive procedure or other corrective measures to achieve intended vision targets.

In contrast, with the RxSight system, the surgeon implants the LAL as they would in any other cataract procedure, determines refractive error with patient input several weeks following surgery and then uses the LDD to modify the LAL with the precise visual correction needed to achieve the patient's desired vision outcomes. We believe our RxSight system provides doctors and patients increased confidence and peace of mind by eliminating the high-stakes preoperative guesswork common to conventional premium IOLs and allowing patients to iterate their final vision characteristics with customized post-surgical adjustments.

Currently, we primarily compete in the IOL market in the U.S. The LAL is a premium IOL which is partially reimbursable under Medicare, and in some cases by private payors. Premium IOLs are sold at a higher price point than conventional IOLs as they provide refractive vision correction, whereas conventional IOLs simply replace the natural lens with a clear lens (which is the standard for Medicare reimbursement). Our RxSight system is approved in the U.S. and several foreign countries for improving uncorrected visual acuity by adjusting the LAL power to correct residual postoperative refractive error. Outside of the U.S., we presently have approval in Europe, Canada, Mexico, Singapore, Australia and South Korea, and we intend to seek additional approvals in the future to broaden our international presence. In non-U.S. markets, reimbursement and healthcare payment systems vary significantly by country. Some have instituted price ceilings on specific products and therapies. In many countries, analogous determinations to the dual aspect CMS ruling have been made, allowing for partial coverage of the cataract procedure by national health systems, with patients paying out of pocket for refractive services associated with the premium IOL. In other countries, similar dual billing is not allowed. While we are growing our presence outside the U.S., we do not anticipate meaningful near-term sales from these non-U.S. regions.

We are a Delaware corporation headquartered in Aliso Viejo, California with two wholly owned subsidiaries located in Hong Kong ("RxSight, Hong Kong") and in Amsterdam, Netherlands ("RxSight, Netherlands"). RxSight, Netherlands has a registered branch in the United Kingdom and a wholly owned subsidiary located in Germany ("RxSight Germany").

Our commercial efforts began in 2019, and have been primarily focused in the U.S., where we are building a "razor and razor blade" business model to drive new customer adoption and ongoing LAL volume growth. Our sales efforts are concentrated on the approximately 3,500 to 4,000 U.S. cataract surgeons that perform approximately 60% of all premium IOL procedures. As of December 31, 2025, we have established an installed base of 1,134 LDDs in ophthalmology practices and, since our inception through December 31, 2025, surgeons have implanted approximately 300,000 LALs.

We believe this business model provides an attractive and concentrated market opportunity addressable with a focused sales force. Our commercial organization includes LDD sales personnel, LAL account managers, clinical specialists, field service engineers, and marketing personnel. We recently completed a full realignment of our U.S. commercial organization by integrating our clinical and sales teams into a single unified Customer Success Organization. We believe this new structure will not only help us better support our existing customers, but it will also position us for the next phase of adoption. Each integrated team within the Customer Success Organization is responsible for a defined group of doctors and practices, managing the

customer experience from onboarding through long-term LAL utilization growth. The majority of employees in our approximately 200-person commercial organization are in the Customer Success Organization. We plan on growing our business by increasing LAL adoption, expanding our LDD installed base, and driving heightened awareness of what we believe to be superior clinical outcomes that our RxSight system provides patients. We have found that ensuring clinicians understand our technology, are well-trained in its use, and understand the number of patients our technology can benefit, increases utilization. Our Customer Success Organization is focused on providing this support to our customers.

Our near-term research and development activities are focused on enhancements to the RxSight system to improve clinical outcomes, enhance customer experience, expand our indications for use, reduce manufacturing costs and support lifecycle management. We believe our adjustable lens solution can be used to address a broad range of cataract surgery patients, including those that would otherwise elect for a conventional cataract procedure today. We will undertake additional clinical studies to expand the existing body of evidence related to the safety and effectiveness of our current and future generations of products. Finally, we may in the future seek to acquire or invest in additional businesses, products or technologies that we believe could complement or expand our portfolio, enhance our technical capabilities or otherwise offer growth opportunities.

While we continue to make investments in our sales and marketing organization, including personnel in clinical applications, practice development, sales and technical service personnel, we also intend to expand our marketing efforts through additional print and digital, social media, education and other customer tools to drive further adoption of the RxSight system.

Additionally, we have incurred and expect to continue to incur costs related to operating as a public company, such as director and officer insurance premiums, audit fees, costs for compliance with Section 404(b) of the Sarbanes-Oxley Act, legal fees, investor relations fees, fees to members of our Board of Directors, and expenses for compliance with public-company reporting requirements. Because of our ongoing investment in our business and products and these and other factors, we expect to continue to incur net losses and negative cash flows from operations for the near future.

Key business metrics

We regularly review several operating and financial metrics to evaluate our business, measure our performance, identify trends affecting our business, formulate our business plan and make strategic decisions.

Our results are influenced by several key factors, including: (i) growth in our LDD installed base, which enables LALs to be implanted; (ii) the utilization of that installed base for LAL procedures, measured by the number of LALs implanted per installed LDD; (iii) product mix between LALs and LDDs, which affects our overall gross margins; (iv) manufacturing cost trends; and (v) seasonal and external factors that may affect cataract surgery volumes. We believe the number of LDDs installed and LALs implanted are the strongest indicators of the adoption of our technology and our ability to generate revenue. We monitor average monthly utilization, which we define as the number of LALs implanted during a quarter divided by the LDD installed base at the end of the prior quarter. This fluctuates due to seasonality, practice ramp, and external disruptions (including severe weather events).

During 2025, we sold 163 LDDs, which was a decrease of 142 LDDs when compared to the prior year due to slower adoption of our RxSight technology by practices and doctors. LAL sales increased by 11,560 units when compared to the prior year, primarily due to the larger LDD installed base.

Components of results of operations

Sales

Our sales consist of LALs used in cataract surgeries, the LDDs for delivering light to the LALs to adjust the lens post-surgery, as needed, and service and accessories. Revenue is derived from sales of products mainly in the U.S. and select international markets. Customers are primarily comprised of ophthalmic practices (LDD sales) and ambulatory surgery centers (LAL sales). We recently completed a full realignment of our U.S. commercial organization by integrating our clinical and sales

teams into a single unified Customer Success Organization. Each integrated team within the Customer Success Organization is responsible for a defined group of doctors and practices, managing customer experience from onboarding through long-term LAL utilization growth. Following several years of rapid growth, sales moderated in 2025, and we expect our commercial realignment initiatives to position the company for renewed revenue growth. We plan to drive continued expansion by supporting existing practices and strategically expanding our LDD installed base and helping new adopters in achieving early success and sustained long-term growth.

In the U.S. LALs are held at customer sites on consignment. Revenue is recognized for LALs upon customer notification that the LALs have been implanted in a patient. Outside the U.S., generally, LALs are held at distributor sites and distributor customer locations, with revenue recognized for LALs upon the distributor notification that the LALs have been implanted in a patient or upon shipment to the distributor.

Our LDD contracts contain multiple performance obligations bundled into one transaction price, with all obligations generally satisfied within one year. Revenue for the LDD capital asset is recognized at a point in time either at installation and acceptance or upon shipment to our international distributors. Revenue for training is also recorded at a point in time, generally 60 days after installation. Revenue for the device service is recognized ratably over time after installation, generally 12 months. After the first year, service contracts can be purchased separately on a standalone basis. Revenue for such service agreements will be recognized ratably over the term of each contract.

For the years ended December 31, 2025 and 2024, revenue from contracts with customers consisted of the following (in thousands):

For the year ended December 31, 2025 and 2024 we did not have any one customer who individually accounted for more than 10% of revenue.

Cost of sales

Cost of sales consist of materials, labor and manufacturing overhead internally to produce our products as well as the cost of shipping and handling. Overhead costs include the cost of quality assurance, material procurement, inventory control, facilities, equipment and operations management and stock-based compensation. Cost of sales also includes depreciation expense for production equipment and certain direct costs such as shipping costs. Shipping costs billed to customers are included in sales. As we return to growth, we expect cost of sales to increase in absolute dollars as our revenue grows and higher volume of products are sold.

We calculate gross margin as gross profit divided by sales. Our gross margin has been and will continue to be affected by a variety of factors, including average selling prices, product sales mix, production and ordering volumes, manufacturing costs, product yields, headcount and cost-reduction strategies. Our gross margin could fluctuate from quarter to quarter as we introduce new products, increase or decrease units of production for both the LDD and LAL and as we adopt new manufacturing processes and technologies.

Our LDD, as is typical of many medical device capital equipment products, has a lower gross margin, as the material cost of the LDD is a significant portion of the total cost to manufacture. In addition, we do not mark up our LDD substantially because LDDs, once sold, can generate LAL procedures. Our LAL gross margin is higher, with low material cost but high fixed overhead costs.

Operating expenses

Selling, general and administrative expenses

Selling, general and administrative ("SG&A"), expenses consist primarily of personnel-related expenses, including wages, incentive bonuses, stock-based compensation and benefits related to administrative, selling and marketing functions, education programs for doctors, commercial operations and analytics, finance, information technology and human resource functions. Other SG&A expenses include sales commissions, travel expenses, promotional activities, marketing initiatives, market research and analysis, conferences and trade shows, training for doctors, professional services fees such as legal, patent registration costs, accounting, audit fees (including costs for compliance with Section 404(b) of the Sarbanes-Oxley Act), tax fees, board of

directors' expenses, insurance costs, general corporate expenses and facilities-related expenses. We expect SG&A expenses to continue to increase in absolute dollars as we expand our sales and marketing organization and infrastructure to both drive and support the anticipated growth in revenue.

Research and development expenses

Research and development expenses consist of expenses incurred in performing research and development and engineering activities for new products and technology, clinical studies and regulatory submissions and compliance. The expenses include personnel-related expenses, including wages, incentive bonuses, stock-based compensation and benefits, costs incurred at clinical trial sites, regulatory and manufacturing engineering costs, including those related to various laboratory and research equipment and supplies, expense of pre-approved inventory utilized for clinical trial and research purposes, costs incurred in the development of manufacturing processes in excess of capitalizable value, fees paid to consultants and contract clinical organizations and direct FDA related costs and costs related to FDA premarket approval submission preparation. Research and development expenses are expensed as incurred. We expect research and development expenses as a percentage of revenue to vary over time depending on the level and timing of our new product development efforts, as well as our clinical development, clinical trials and registries and other related activities.

Interest expense

Interest expense consist primarily of interest incurred on leases.

Interest and other income, net

Interest and other income, net consist primarily of interest income earned on our short-term investments and cash equivalents.

Comprehensive loss

All components of comprehensive loss, including net loss, are reported in the consolidated financial statements in the period in which they are recognized. Comprehensive loss is defined as the change in equity during a period from transactions and other events and circumstances from non-owner sources, including unrealized gains and losses on short-term investments and foreign currency translation adjustments.

Results of operations

Comparison of the years ended December 31, 2025 and 2024

The following table summarizes our results of operations for the years ended December 31, 2025 and 2024, together with the dollar increase or decrease and percentage change in those items:

Sales

Sales decreased by $5.5 million, or (3.9)%, to $134.5 million in 2025 from $139.9 million in 2024. The decrease in total sales was primarily due to a decline of 142 units, or (47%), in the total number of LDDs sold during the year ended 2025 as compared to the same period in 2024. The lower LDD sales were partially offset by increased LAL sales of 11,560 units, or 12%, when compared to the same period in 2024, which was primarily due to the net increase in our LDD installed base. The reduction in LDD sales was due to slower adoption of RxSight technology among practices and doctors in 2025 as compared to 2024.

Cost of sales

Cost of sales decreased by $9.5 million, or (23.2)%, to $31.5 million for the year ended December 31, 2025 from $41.0 million for the year ended December 31, 2024, primarily due to the decreased number of LDDs sold during the period. Gross margin increased to 76.6% in 2025 from 70.7% in 2024, primarily due to favorable product mix from a greater percentage of revenue from LAL sales, with LAL revenue comprising 80% of revenue in 2025, compared to 69% of revenue in 2024.

Selling, general and administrative expenses

Selling, general and administrative expenses increased by $11.2 million, or 11.1%, to $112.7 million in 2025, from $101.4 million in 2024. This increase was primarily attributable to an increase in selling and marketing costs of $10.0 million, personnel costs of $1.9 million, $2.4 million of increased stock-based compensation expense, $3.9 million in additional marketing study costs, and $1.7 million in new customer acquisition costs, in each case when compared to 2024. General and administrative expenses increased by $1.2 million due to increased stock-based compensation of $1.7 million, which was partially offset by decreases in personnel costs of $0.5 million, primarily due to lower bonus accruals and headcount. We expect selling, general and administrative expenses to continue to expand as we increase our research and development activities, build out our marketing, sales and clinical teams in the U.S. and outside the U.S., and otherwise grow our business.

Research and development expenses

Research and development expenses increased by $4.1 million to $38.5 million in from $34.4 million in 2024, an increase of 12.2%. This increase was primarily attributable to $2.6 million in research and development activities, including the allocation of manufacturing resources and headcount, $2.7 million in increased personnel costs which includes stock-based compensation, offset by a $1.3 million decrease in clinical study and other costs. We expect to maintain our focus on research and development spending as we seek to improve clinical outcomes, improve customer experience, expand our indications for use, reduce manufacturing costs and support lifecycle management.

Other income (expense), net

Other income (expense), net decreased by $0.2 million to income of $9.3 million in 2025 from income of $9.5 million in 2024. This change was primarily due to lower interest rates on investment balances in 2025 as compared to 2024.

Comparison of the years ended December 31, 2024 and 2023

A discussion of changes in our results of operations during the year ended December 31, 2024 compared to the year ended December 31, 2023, has been omitted from this Annual Report on Form 10-K, but may be found in "MD&A - Results of Operations - Comparison of the years ended December 31, 2024 and 2023" in Part II, Item 7 of the 2024 Form 10-K, which discussion is incorporated herein by reference and which is available free of charge on the SEC's website at www.sec.gov.

Liquidity and capital resources

Sources of liquidity

We have incurred significant operating losses and negative cash flows from operations since our inception, and we anticipate that we will continue to incur losses in the near future.

As of December 31, 2025, we had cash and cash equivalents of $19.9 million, short-term investments of $208.2 million, and accumulated deficit of $661.0 million. For the years ended December 31, 2025 and 2024, our net losses from operations were $48.2 and $36.9 million, respectively. We generated sales of $134.5 million and had a net loss of $38.9 million in 2025, compared to sales of $139.9 million and net loss of $27.5 million in 2024.

Contractual Obligations and Commitments

For a discussion of our contractual obligations and commitments, refer to Part II, Item 8, Note 12, "Commitments and Contingencies" in our notes to the consolidated financial statements in this Annual Report on Form 10-K.

Funding requirements

Our future liquidity and capital funding requirements will depend on numerous factors, including:

As of December 31, 2025, we had cash and cash equivalents of $19.9 million and short-term investments of $208.2 million. We believe that our current cash, cash equivalents and short-term investments through the date of filing of this report will be sufficient to fund our operations for at least the next 12 months. Although, based on our current planned operations, we do not anticipate the need to raise additional capital or incur additional debt in order to reach profit from operations, as the same may be disclosed in the Company's future Annual Reports on Form 10-K or Quarterly Reports on Form 10-Q filed with the SEC, we may be required to raise additional capital through public or private equity offerings or debt financings, credit or loan facilities or by entering into partnerships or a combination of one or more of these funding sources in order to meet our liquidity requirements. We may also opportunistically raise capital under advantageous circumstances from time to time to support the expansion of our sales and operations in the U.S. and internationally and to pursue other business opportunities. If we determine that we need to raise additional funds, such capital may not be available to us when needed or on terms that we deem to be favorable. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interests of our stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of common stockholders. Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making acquisitions or capital expenditures or declaring dividends. If we are unable to maintain sufficient financial resources, our business, financial condition and results of operations will be materially and adversely affected, including potentially requiring us to delay, limit, reduce or terminate certain of our product discovery and development activities or future commercialization efforts. If we raise additional funds by issuing equity securities, our stockholders may experience dilution.

See Part I, Item 1A (Risk Factors) of this report for additional risks associated with our substantial capital requirements.

Summary statement of cash flows

The following table sets forth the primary sources and uses of cash, cash equivalents, and restricted cash for each of the periods presented below (in thousands):

Cash used in operating activities

Net cash used in operating activities in 2025 was $15.5 million consisting primarily of a net loss of $38.9 million, a change in operating assets and liabilities of $4.9 million, partially offset by non-cash stock-based compensation of $31.6 million, and depreciation and amortization of $3.3 million.

Net cash used in operating activities in 2024 was $17.0 million consisting primarily of a net loss of $27.5 million, a change in operating assets and liabilities of $9.2 million, partially offset by non-cash stock-based compensation of $24.6 million, and depreciation and amortization of $3.6 million.

Cash used in investing activities

Net cash provided by investing activities in 2025 was $16.9 million, consisting of net maturities of short-term investments of $20.7 million offset by purchases of property and equipment of $3.8 million.

Net cash used in investing activities in 2024 was $99.3 million, consisting of net purchases of short-term investments of $93.9 million and purchases of property and equipment of $5.4 million.

Cash provided by financing activities

Net cash provided by financing activities in 2025 was $1.9 million, consisting primarily of proceeds from issuances of common stock pursuant to equity compensation programs of $3.9 million, partially offset by tax payments for employee stock compensation of $2.0 million.

Net cash provided by financing activities in 2024 was $123.3 million, consisting primarily of proceeds from issuances of common stock from our public offering of $108.1. million, and proceeds from issuance of common stock pursuant to equity compensation programs of $20.8 million, partially offset by tax payments for employee stock compensation of $4.8 million.

Critical accounting policies, significant judgments and use of estimates

Our management's discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the U.S. of America ("GAAP"). The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions, which may affect our future financial statement presentation, financial condition, results of operations and cash flows.

We believe that the accounting policies we use are critical to the process of making significant judgments and estimates in the preparation of our financial statements and understanding and evaluating our reported financial results. Our significant accounting policies are described in more detail in the "Summary of Accounting Polices" in Note 2 in the Notes to Consolidated Financial Statements included in Part II - Item 8 in this report. An accounting policy is deemed to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, if different estimates reasonably could have been used, or if changes in the estimate that are reasonably possible could materially impact the financial statements. We believe that of all our significant accounting policies, the following accounting policies we have identified as critical involve a greater degree of judgment and complexity than our other accounting policies. Accordingly, the policies below are what we believe are the most critical to aid in fully understanding and evaluating our consolidated financial condition and results of operations.

Revenue recognition

Our revenue is generated from the sale of LALs used in cataract surgery along with a specifically designed machine for delivering light to the eye, the LDD, to adjust the lens post-surgery. Revenue is recognized from sales of products in the U.S. Canada, Europe and Asia to ambulatory surgery centers, hospitals, physician private practices and distributors.

We recognize LDD revenue primarily at the point in time at installation and customer acceptance of the LDD is satisfied. LALs are generally held at customer sites on consignment. Revenue is recognized for LALs upon customer notification that the LALs have been implanted in a patient or upon shipment to an international distributor. The timing of revenue recognition for LDD transactions and LAL transactions requires management judgment. Revenue recognition is reasonably likely to have a material impact on our financial condition and results of operations.

Indemnification agreements

We enter into standard indemnification arrangements in the ordinary course of business. Pursuant to these arrangements, we indemnify, hold harmless and agree to reimburse the indemnified parties for losses suffered or incurred by the indemnified party, in connection with any trade secret, copyright, patent or other intellectual property infringement, misappropriation or other violation claim by any third party with respect to its technology. The term of these indemnification agreements is generally perpetual any time after the execution of the agreement. The maximum potential amount of future payments we could be required to make under these arrangements is not determinable. We have never incurred costs to defend lawsuits or settle claims related to these indemnification agreements. As a result, we believe the fair value of these agreements is minimal.

Recent accounting pronouncements

See the section titled "Summary of Accounting Policies-Recent Accounting Pronouncements" in Note 2 to our Consolidated Financial Statements included in Part II - Item 8 in this Annual Report on Form 10-K for additional information.

Supply chain constraints and inflation

We rely on third parties, including single and sole source suppliers, to manufacture certain components and subcomponents of our products and to provide raw materials, primarily chemicals for our LAL. We do not have long-term supply agreements with, or guaranteed commitments from our suppliers, including single and sole source suppliers. We utilize purchase orders or blanket orders covering the medium term of 18-24 months for the majority of our supplier base. While we depend on our suppliers to provide us and our customers with materials in a timely manner that meet our and their quality, quantity and cost requirements, vendors will miss delivery dates, extend delivery dates or in some circumstances cancel purchase orders because these suppliers may encounter problems during manufacturing for a variety of reasons, any of which could delay or impede their ability to meet our demand. The expansion of global lead times has resulted in the lack of availability of raw materials, including

semiconductors, computers, monitors electronic parts, metals, packaging, adhesives, chemicals, resins and subcontract painted components. Certain suppliers have passed on higher prices, surcharges and expedited shipping fees to defray the higher commodity prices they are paying due to short supply and pushed out delivery dates. Additionally, we identify and qualify new suppliers to mitigate risk due to single and sole source suppliers and to alleviate supply chain constraints we will identify and qualify new vendors or substitute components which requires testing, validations and documentation adding to internal costs and diverting engineering resources from other projects. While we have taken measures to mitigate business continuity risk, including increasing standard lead times, payment of expedite fees, issuance of a limited number of non-cancelable purchase orders, advance delivery of critical components ahead of normal delivery dates and second sourcing, our suppliers may cease producing the components we purchase from them or otherwise decide to cease doing business with us. Any supply interruption from our suppliers or failure to obtain additional suppliers for any of the components or subcomponents used in our products would limit our ability to manufacture our current and new products and could have a material adverse effect on our business, financial condition and results of operations.

Uncertain macroeconomic conditions including recent inflationary pressures and the rise in interest rates have created significant uncertainty in the U.S. economy and capital markets, which is expected to continue through 2026 and beyond and could negatively impact our financial results and liquidity.